Every month, Nigerian state governors assemble at the Federal Capital Territory (Abuja) to get their share of the national cake from the Federal Accounts Allocation Committee (FAAC).
In Nigeria, this is how most state governments are funded.
Key takeaways
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Seven years after JP Morgan announced it would take Nigeria off its global bond index (GBI-EM), the investment bank downgraded Nigeria on its emerging market sovereign recommendations list on May 11, 2022.
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Nigeria was moved from an overweight to a market weight country, which means that the country’s bonds are risky and will likely not provide better yields than other emerging market economies
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The downgrade will trigger an increase in the risk premiums attached to Nigeria’s bonds and negatively impact investment inflows.
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Lower investments mean less government revenue and continued forex illiquidity in the short term.
In the past, we have covered how government revenue is shared, but here’s the recap:
